Tax Tips for Military Personnel

Posted at 6:45 pm in IRS,Property,Tax Deductions,Tax Filing
Capt. Rob Dewberry leaves his post as commande...

Image via Wikipedia

The Service Members Civil Relief Act (also known as SCRA) is a tax act that applies to active military personnel. It provides tax benefits beginning as soon as you receive your orders for active duty. Here are 8 tax tips for military personnel regarding your benefits under SCRA.

1. You are not charged state income taxes in a state that you are not a resident of while you are working for the military. Your spouse is also protected from an increase in their income tax due to your income.

2. You are given a longer period of time to pay your taxes while in active duty. This grace period lasts until 180 days after your active duty ends.

3. If you give you life in the service of your country, your death gratuity (which is payable to your family) is tax free.

4. You are permitted to claim some travel expenses (usually within a hundred miles from your residence) as part of your military responsibilities. Claim these expenses on line twenty four of tax form 1040.

5. You are permitted to designate another person to represent you to the IRS regarding your tax return. This person can respond to inquiries from the IRS regarding your tax return while you are overseas or on active duty.

6. Some of your income military benefits are tax, including combat pay. You are also permitted to deduct interests form your mortgage and property taxes even if you use BAH to pay for your home. Legal fees, dental care and child care can be used as deductions.

7. You are eligible for an Earned Income Credit at a higher income than civilians. If you have several children and earned $34,458, or one child and earned $30,328 you are still eligible for EIC. You may not file foreign earned income if you wish to claim this credit, and returns on personal investments must be under $2650.

8. While in active duty you are exempt from residency requirements, which state you must live in the United States for half of each tax year.

Jacobi is a former soldier in the United States army, he learned the hard way that tax law is more flexible for US’ finest.